How North Dakota taxes retirement income

Some 2026 figures pending confirmation Tax year 2026 · research last updated October 2, 2026

North Dakota doesn't tax Social Security benefits.
North Dakota has no general exclusion for pension or IRA income; it's taxed like other income (credits and age-based amounts are below).
Rates for 2026: 0% to 2.5%, graduated.

At a glance

Income tax	Yes
Rates (2026)	0% to 2.5%, graduated
Starts from	Federal taxable income
Social Security	Not taxed
Retirement income exclusions	None
Roth conversions	Taxable
Capital gains	Special treatment (see below)
Local income tax	None

Tax rates

Brackets apply to North Dakota taxable income. Other filing statuses are in the rules reference.

Rate	Single: taxable income	Married filing jointly: taxable income
0%	$0 to $49,575	$0 to $82,800
1.95%	$49,575 to $250,400	$82,800 to $304,850
2.5%	$250,400 and up	$304,850 and up

North Dakota doesn't tax Social Security benefits.

Form ND-1 line 15: subtract the taxable Social Security reported on federal Form 1040 line 6b (the federal standard deduction / senior deduction are already embedded in federal taxable income). Taxable Tier 1 Railroad Retirement equivalent benefits go on line 8 instead (also fully subtracted).

Pensions, IRAs and 401(k)s

North Dakota has no general exclusion for pension, IRA or 401(k) income in 2026. It's taxed at the rates above, after any deductions and credits.

Roth conversions

A Roth conversion counts as taxable income for North Dakota.

Capital gains

40% exclusion of net long-term capital gain (Form ND-1 line 6): the smaller of federal Schedule D line 15 (net LTCG) or line 16 (net gain), or capital gain distributions if no Schedule D, times 40%. Separately, 40% of federal qualified dividends (Form 1040 line 3a) are excluded (Form ND-1 line 13). Both are subtractions from federal taxable income. Short-term gains get no exclusion; if Schedule D shows a net loss, no exclusion.

Credits and relief for older residents

Marriage penalty credit (Form ND-1 line 22). Joint filers only. 2025 parameters: joint ND taxable income > $81,036 and the lower-earning spouse's 'qualified income' > $47,550. Qualified income per spouse = wages + net SE income + taxable IRAs, pensions, annuities and Social Security (Form 1040 lines 4b, 5b, 6b), reduced by amounts subtracted on ND-1 lines 8 and 15 (so taxable SS is effectively removed). Credit = joint-schedule tax on taxable income minus sum of single-schedule tax on each spouse's share after allocating $15,750 per worksheet; max $312. 2026 parameters not yet published.

More detail from our research notes

No general pension/IRA/annuity exclusion: IRA, 401(k), private and public pensions (other than military retirement, licensed peace officer retirement, and U.S. Railroad Retirement) are fully taxed at ND rates. Military retirement is fully subtracted (line 14) and licensed-peace-officer retirement with 20 years' service is subtracted — military/peace-officer-only provisions noted only. Brackets are indexed annually by the Tax Commissioner (N.D.C.C. 57-38-30.3) — the 2026 figures above are the published indexed amounts. Because the starting point is federal taxable income, any federal change to the standard deduction (e.g., OBBBA senior $6,000 deduction, which phases out above federal MAGI $75,000/$150,000) changes ND tax. Federal QBI deduction also flows through. Estimated-tax threshold is $1,000.

Pending confirmation

These points were still being confirmed against North Dakota's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.

3 items

2026 marriage penalty credit: N.D.C.C. 57-38-01.28 fixes the method (joint-schedule tax minus single-schedule tax on the lesser earner's qualifying earned/pension income less half the federal basic joint standard deduction, i.e. $16,100 for 2026; max $300 indexed with the brackets). The 2026 maximum ($319 = 2025's $312 x 49,575/48,475, derived) is not yet published; it appears in the 2026 ND-1 instructions marriage penalty worksheet (expected Dec 2026/Jan 2027, https://www.tax.nd.gov/forms).
2026 ND tax table (for ND taxable income < $100,000 the return uses $50 bands with midpoint computation, which can differ from the exact schedule by a few dollars).
The 2026 rate schedule is from Form ND-1ES 2026; the ND-1 2026 booklet itself is not yet published (expected ~Dec 2026).

Sources

Every figure comes from these documents, mostly the state's own forms, instructions and statutes.

2026 tax rate schedules (all filing statuses)https://www.tax.nd.gov/sites/www/files/documents/forms/individual/2025-iit/28709-form-nd-1es-2026.pdf
2025 ND-1 instructions: starting point = federal taxable income, 40% LTCG exclusion worksheet (line 6), 40% qualified dividend exclusion (line 13), Social Security subtraction (line 15), military retirement (line 14), marriage penalty credit worksheet,…https://www.tax.nd.gov/sites/www/files/documents/forms/software-developer/individual-income-forms/2025-iit-instructions.pdf
2026 withholding booklet (cross-check that 2026 rates are 0% / 1.95% / 2.50%)https://www.tax.nd.gov/sites/www/files/documents/forms/individual/2026-iit/2026-income-tax-withholding-rates-booklet.pdf
N.D.C.C. ch. 57-38 (current): 57-38-01.28 marriage penalty credit ($300 base, indexed with 57-38-30.3(1)(g)); 57-38-30.3(1) rates 0/1.95/2.5% with federal-COLA indexing; 57-38-30.3(2)(d) 40% exclusion of net LTCG and qualified dividends (no sunset); no…https://ndlegis.gov/cencode/t57c38.pdf

Taxtirement's North Dakota calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.

See your own years. Taxtirement applies these North Dakota rules, and the federal and Medicare rules, to your household for every year of retirement, and shows the calculation behind each number. Coming November 2026 for iPhone, iPad and Mac.

This page summarizes North Dakota's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.